Euro starts the week with strong growth
2023.01.30 09:42
Euro starts the week with strong growth
On Monday, the euro is trading in the positive zone. is up 0.36 percent, trading at 1.0907 during the European session.
The euro, which continues to cling to the 1.09 level, had a quiet week. I anticipate that volatility will increase this week due to the release of GDP and inflation data from the eurozone and the ECB rate announcement on Thursday.
The fourth quarter saw a rare decline in the German economy. came in at -0.2% q/q, which was less than the forecast of zero and was down from 0.4% in Q3. GDP slowed to 1.1% annualized, down from the 1.3% read in Q3, which was also forecast.
The markets are anticipating more bad news on Tuesday from the eurozone. After a decrease of 5.9% in November, they are anticipated to decrease by 4.3% year-over-year. In comparison to 2.3% in Q3, the Eurozone is anticipated to slow to 1.8% y/y in Q4.
This week’s GDP and inflation data will be closely monitored by the ECB ahead of a crucial rate decision on Thursday. Despite taking a hawkish stance, the central bank is still behind inflation, which is currently 9.2%. The markets anticipate a rate hike of 50 basis points at the March meeting, but what happens after that is unknown.
The ECB would love to lower rates, but reducing high inflation is the most important factor. The current rate-tightening cycle still has a lot of life left in it because the cash rate is still 2.50 percent and the markets anticipate a terminal rate between 3.25 and 3.75 percent.
Technical Analysis
- EUR/USD is testing support at 1.09100. Below, there is support at 1.08400
- 1.09600 and 1.10300 are the following resistance lines
